It was a detail that needed underscoring considering the focus of their startup, an on-demand delivery service. The once hearty appetite for them among investors has vanished because of the sector’s thin margins, high labor costs, and tricky economics that have caused many similar companies to cut jobs or shut down.

But Rappi, a one-year-old startup based in Colombia, delivering meals, groceries, is betting that it can buck the odds and become a lucrative business. Latin America’s market is better suited for on-demand delivery services than the U.S., according to Simon Borrero, the company’s co-founder and CEO.

"The on-demand economy, we feel, is meant to be in emerging markets," he told Fortune over coffee last month.

A growing middle and upper class is increasingly warming to the idea of having their meals and groceries delivered to them via motorcycles and bicycles. Additionally, there’s a real need for alternatives to postal services in the region because of their unreliability.

Rappi’s founders realized they had an opportunity to grow beyond delivering dinner and other basic shopping staples when customers started to use the service to have their income tax payments delivered to banks. Yes, customers trust Rappi with their tax documents and hundreds or even thousands of dollars they need to pay at the bank.

From the start, Rappi’s app featured a blank box in which customers could list whatever they wanted delivered. And customers inevitably entered the unexpected.

At least 100 times, customers have paid a courier to walk their dog, according to Borrero. Another unusual and increasingly popular delivery is cash withdrawals.

Customers who have credit cards pay for the amount they want via Rappi’s app, and the courier brings them the cash. Cash withdrawals now make up about 5% of the company’s gross merchandise volume, according to Borrero.

While there are plenty of ATMs in Colombia, where five of the cities Rappi currently serves are located, it’s not always safe to venture out to use them--especially late at night, he explains. So instead, customers request up to 400,000 Colombian pesos, or about $130 U.S., through Rappi’s couriers.

About 60% to 63% of orders are paid in cash, while the rest are paid via the app, using customers’ credit and debit cards, according to Borrero.

Of course, Rappi isn’t the first delivery company. In the U.S., Postmates is perhaps the best known. There’s also UberEats, the ride-hailing company’s food delivery service, as well as DoorDash, Favor, and Square-owned Caviar.

In general, profit margins in the industry are thin while managing hundreds of couriers is challenging. RocketSpoon, a U.S. service that cooked and delivered meals shut down earlier this year, as did European food delivery startup Take Eat Easy over the summer, to name a few that have struggled. Last month, Bloomberg reported that payments company Square unsuccessfully attempted to sell its food delivery business, Caviar.

From the start, Rappi has been helped by its second business of partnering with consumer packaged goods (CPG) companies to give them more prominent placement in its app in exchange for a fee. As it happens, prior to Rappi, Borrero and one of his co-founders create and sold online shopping software to large retailers like El Corte Ingles in Spain and Cencosud in Chile. Their company, Grability, also keeps part of the fees that CPG companies pay to have their products prominently featured on the websites and apps of retailers using Grability’s software.

Some U.S. delivery startups, like Instacart and Postmates, have recently begun to strike similar deals with consume packaged goods companies.

These deals also lend themselves well to Rappi’s app, which is organized by products instead of stores, as Jeff Jordan, the partner at Andreessen Horowitz who led his firm’s participation in Rappi’s $9 million round in April, told Fortune. Other investors in the round, undisclosed until now, include Foundation Capital and Redpoint Ventures.

Today, the placement deals account for 55% of Rappi’s revenue, according to Borrero, while the rest comes from the 15% cut it takes from partner merchants for each order and additional fees for handing out product samples to it customers. Last month, for example, Rappi delivered 100,000 Coca-Cola bottles.

Rappi, which isn’t profitable, has about 80,000 monthly users in Colombia, where five of its six markets are located. It completes about 8,700 deliveries daily in total across all cities.

Rappi’s couriers are paid roughly $1 for each delivery.

The company also has some big partnerships like with Wal-Mart’s Mexico City stores as its exclusive delivery service. Recently, Rappi also signed a deal with Sony to be the exclusive seller in Colombia of its PlayStation products like video games and other items.

Of course, larger companies like Amazon and Uber, which operate to varying extents in Latin America, are still a threat. Uber’s ride-hailing service operates in Colombia and other Latin American countries, but Borrero argues that its reliance on cars for rides (and deliveries in countries where its delivery service is available) is a disadvantage considering the heavy traffic in many Latin American cities. However, Uber is apparently learning the lesson and has started to provide rides on motorbikes in India and Southeast Asia. And Amazon is never a company to underestimate.

"I don’t think Rappi is claiming victory at this point," said Jordan. "The company is off on a good start, but it’s a start."

The story has been updated to clarify that Andreessen Horowitz did not fund Rappi’s entire $9 million round.

]]>http://fortune.com/2016/11/08/rappi-delivery-latin-american/feed/0Rappi deliverykiakokalitchevaWhole Foods Just Hired a Top Former Theranos Exechttp://fortune.com/2016/09/07/theranos-communications-whole-foods/
http://fortune.com/2016/09/07/theranos-communications-whole-foods/#respondWed, 07 Sep 2016 20:01:10 +0000http://fortune.com/?p=1789395]]>Whole Foodswfm is enlisting a new crop of talent to join its executive ranks--including the woman who fielded pointed questions lobbed at embattled blood diagnostics firm Theranos.

The health food chain announced the hiring of Brooke Buchanan, who was vice president of communications at Theranos until her departure in June, as Global VP of Communications in a blog post. The company also announced that former Wal-Martwmt and Sam’s Club exec Sonya Gafsi Oblisk has been appointed global VP of marketing and Starbuckssbux talent guru Martin Tracey will head up human resources.

Buchanan was at Theranos for less than a year--a tenure marked by the company’s rapid fall from grace amid mounting scrutiny of its technology’s accuracy and CEO Elizabeth Holmes’ penchant for secrecy. She was forced to address a series of debacles that hit the firm during that time, including lawsuits, Congressional inquiries, and regulatory heat.

Prior to joining Theranos, Buchanan had served in multiple corporate PR roles, including at Wal-Mart, and was Senator John McCain’s communications director during his presidential bid in 2008.

Whole Foods isn’t in nearly the same precarious position as Theranos is. But Buchanan will still have her work cut out for her. The chain has been facing increasing pressure from cheaper competitors in the health food and groceries space and has seen share prices fall more than 13% year-to-date.

The debate over whether the deal is a failure for founder Marc Lore rages on. Yes, we live in a world where selling your startup for $3 billion can be considered a failure.

The problem was Lore’s stated plan of taking on one of the Web’s handful of monopolies: AmazonAMZN, which acquired his first company after a price war. It was a goal so wild and ambitious that not a single other entrepreneur would dare go after it. For all the press his bold plot garnered, whenever I spoke with Lore, he was matter-of-fact about his plans, genuinely surprised that anyone would find them audacious. He always knew he was going to need to raise billions of dollars to make this work. It was nearly impossible to get him to concede that the odds were completely against him. It’s also possible he knew that Wal-Mart, the enemy of his enemy, would likely be desperate.

In the press release, Jet touts a $1 billion “run rate” in gross merchandize value sales. Sure, it feels cheap to extrapolate revenue based on one strong month of sales, but $80 million in monthly sales after just a year in business is nothing to sneeze at (even if you were burning far more more money than that to achieve it). If Jet had waited much longer to sell — say, after another round of funding with a higher valuation — it may have been too expensive for Wal-Mart to justify the price to its shareholders.

For its part, Wal-Mart is doing the awkward tightrope walk of a company that just bought itself some innovation, but can’t insult past attempts at innovation in the process. McMillon called the deal “another jolt of entrepreneurial spirit being injected into Wal-Mart.” The careful use of the word “another” is code for “never own up to our shortcomings.”

One person that definitely sees this deal as a raging success is Eric Martin, the funeral industry worker from Central Pennsylvania who won himself 100,000 shares of Jet stock a year ago in an unusual sign-up promotion. If anyone knows the exact share price for this deal, I’d love to do the math on what this guy walked away with.

]]>http://fortune.com/2016/08/08/jet-com-wal-mart-failure/feed/0Marc Lore hq 2015griffitherinJet.com’s Founder Has Made a Lot of Money by Annoying Amazonhttp://fortune.com/2016/08/03/jet-com-founder-amazon/
http://fortune.com/2016/08/03/jet-com-founder-amazon/#respondWed, 03 Aug 2016 20:27:42 +0000http://fortune.com/?p=1758405]]>It's a feat many entrepreneurs dream about, but few achieve: a multimillion-dollar acquisition offer from an industry giant.

Marc Lore has already lived out this dream once. In 2011, he sold his startup Quidsi (the parent company of a number of websites, including Diapers.com) to Amazon for $545 million.

The Journal paints the possible sale as a disappointing end for a company that, in a short amount of time, managed to put Amazon on its toes. It's certainly true that an acquisition is a far less glorious outcome than if Lore was able to build Jet.com into a true Amazon rival. Some of techland's most prominent companies — Facebook, Snapchat, Dropbox — owe their existence to founders' refusal of early, fat acquisition offers. Perhaps Jet.com was destined for a similar trajectory,although there were troubling accounts that the startup was burning through its mountains of VC cash at an unsustainable rate. If the sale goes through, we'll never know.

That said, it's not hard to admire Lore's strategy. The man has already made a killing by being a thorn in Amazon's massive side:the ecommerce titan bought Quidsi for $545 million after the startup, which offered deep discounts on products such as diapers and cleaning supplies, forced the company to engage in pricing wars. And now, if the report is correct, the same strategy is about to land him a much larger windfall.

In less than a year, thanks to its big ambitions, more than $550 million in venture capital and low prices, Lore managed to turn Jet.com into a potential Amazon rival. And, per the Journal, while the likely sell illustrates "the challenges of attempting to go it alone in the hypercompetitive e-commerce market," it's also proof Jet.com has turned itself into a multibillion–dollar tool, one Wal-Mart can deploy in its own battle with Amazon. (An acquisition would give Wal-Mart access to Jet's pricing software and its customer data).

If the deal goes through, Lore will no longer head up a company that has been dubbed the "Amazon killer"; instead, Jet.com will simply become one more weapon in Wal-Mart's arsenal.

And so for the second time, it appears his efforts to go head-to-head with Amazon won't end in its defeat. But by creating another company able to ruffle the ecommerce giant's formidable feathers, he's looking at an even bigger payout.

]]>http://fortune.com/2016/08/03/jet-com-founder-amazon/feed/0Marc Lore 2016lauraentis89Wal-Mart Just Shook up Its International Managementhttp://fortune.com/2016/06/13/walmart-international-uk-china-management/
http://fortune.com/2016/06/13/walmart-international-uk-china-management/#respondMon, 13 Jun 2016 12:59:41 +0000http://fortune.com/?p=1695962]]>Walmartwmt has turned to the chief of its Chinese business Sean Clarke to revive Asda, its British supermarket group which has been one of the biggest casualties in an industry price war that has hammered its sales for nearly two years.

The U.S. group said Clarke would take over from his namesake Andy Clarke at Asda on July 11, tasked with repositioning the chain, which ranks third after Tesco tscdy and Sainsbury’s jsnsf, in the tough British marketplace.

The move comes as a surprise after Andy Clarke said last week that Roger Burnley would succeed him at some point after the incoming executive joins the firm in October. Asda poached Burnley from rival Sainsbury’s last year.

Wal-Mart International’s president and chief executive David Cheesewright said Burnley would be deputy chief executive, and he viewed him as a “top talent and future chief executive”.

Sean Clarke, who started his career at Asda in 2001, said he was “looking forward to returning to the business that got him hooked on retail”.

He rejoins a supermarket that has reported seven straight quarters of underlying sales declines, and a loss of market share, including surrendering its second place in the market to Sainsbury’s, according to industry data.

Asda has been the laggard among Britain’s big four supermarkets, which also includes Wm Morrisons plc, as German discount chains Aldi and Lidl have successfully targeted British shoppers. Morrisons mrwsy recently partnered with Amazon amzn in a bid to restore its fortunes.

Andy Clarke has run Asda for six years.

Wal-Mart said last month it would shift the balance of Asda’s strategy from protecting profits to protecting market share, indicating more price cuts might be on the way.

The company also said Dirk Van De Berghe, CEO of Wal-Mart Canada, will take over leadership of Walmart’s China business.

]]>http://fortune.com/2016/06/13/walmart-international-uk-china-management/feed/0Leading UK Supermarkets Compete For Their Share Of The Market In The Run Up To ChristmasgeoffreytsmithWhy It’s Better to Live Near a Target Than a Walmarthttp://fortune.com/2016/03/10/target-walmart-homeowner/
http://fortune.com/2016/03/10/target-walmart-homeowner/#respondThu, 10 Mar 2016 18:14:47 +0000http://fortune.com/?p=1581982]]>It's widely known that location matters, especially when it comes to the value of your home. And the difference between living near a Target tgt vs. a Walmart wmt could be pretty substantial, according to a new report.

Online real estate information company RealtyTrac analyzed home values, appreciation, and property taxes in U.S. zip codes with a Walmart or a Target to determine which superstores give homeowners the biggest returns on their investments.

As it turns out, homeowners living near a Target saw the value of their homes rise higher since purchase. Among homeowners who sold in 2015, those with homes near a Target experienced an average 27% increase in home prices, which equals to an average gain of $65,569. That's compared to a 16% increase, or $24,900, for homeowners near a Walmart.

Walmart responded to RealtyTrac’s report, saying "Not only are we serving customers with our stores, we're positively impacting the communities our stores are located in, whether it's increased property value or increased sales tax revenue.” A company spokesperson added, “In addition to this RealtyTrac study, a 2012 study published by the National Bureau of Economic Research showed that homes located within a half mile of a Walmart showed an increase in property value compared to homes that were not."

It also costs homeowners more to live near a Target. Based on 2014 data, they pay higher property taxes--on average, $7,001 a year, or 123% more than the $3,146 a year for homeowners near a Walmart. They also pay more than the $4,283 average property tax bill nationwide.

What's more, based on 2015 data, homeowners who live near a Target pay more for their homes--$307,286, or 72% more than the $178,249 average value for homes near a Walmart, and more than the average home value of $215,921 nationwide.

This article has been updated to include comments from Walmart.

]]>http://fortune.com/2016/03/10/target-walmart-homeowner/feed/0target signnt2192Wal-Mart Is Taking Back Control of Its Gas Stationshttp://fortune.com/2016/02/04/wal-mart-gas-stations/
http://fortune.com/2016/02/04/wal-mart-gas-stations/#respondThu, 04 Feb 2016 15:19:31 +0000http://fortune.com/?p=1537540]]>After two decades of contracting out its parking lot gas stations, Wal-Mart is now going to be operating the fueling stations themselves.

Going forward, the Arkansas-based retailing giant will be building and operating its own gas stations, reports the Wall Street Journal. Murphy USA, Wal-Mart’s former partner in the business, will continue to operate the approximately 1,000 gas station already built around Wal-Mart wmt stores.

While tumbling gas prices have hurt oil companies, the Journal notes that gas station operators haven’t felt the same squeeze. If anything, lower gas prices make it more likely that drivers will pop into the station for candy and sodas, which have much higher profit margins than gasoline.

This decision is seen as a move from Wal-Mart CEO Doug McMillon to find as many sources of profit as possible. Wal-Mart is losing retail share to Amazon amzn and other online retailers, and operating its own gas stations could help to replace some of that lost revenue.

]]>http://fortune.com/2016/02/04/wal-mart-gas-stations/feed/0473887958bgfortuneWalmart Canada Will Start Charging for Plastic Bagshttp://fortune.com/2016/01/25/walmart-canada-plastic-bag/
http://fortune.com/2016/01/25/walmart-canada-plastic-bag/#respondMon, 25 Jan 2016 17:36:48 +0000http://fortune.com/?p=1524706]]>In an effort to promote the use of reusable bags and reduce waste, Walmart Canada announced on Monday that it will start charging customers who request plastic bags at checkout. The new initiative is part of its ongoing efforts to ultimately achieve zero waste.

The elimination of free single-use plastic bags will be rolled out across Canada starting February 9. Customers who request plastic bags at checkout will be charged five cents per bag.

Walmart wmt recognizes that it’s asking customers to change their shopping behavior, Lee Tappenden, chief operations officer of Walmart Canada said in a statement. “[B]ut we strongly believe that removing plastic film from our waste stream is imperative to reaching our goal of zero waste and will encourage our customers to broaden their already existing waste-reduction efforts.” He said that in other international markets, fees encouraging customers to use reusable bags has reduced single-use plastic bags by more than 50%. “Similar programs here in Canada have reported comparable successes,” he said.

]]>http://fortune.com/2016/01/25/walmart-canada-plastic-bag/feed/0Wal-Mart logos apprear on shopping bags at a cash register iclairezillmanGoogle Drone Guru Says Air Deliveries Coming As Soon As Next Yearhttp://fortune.com/2016/01/11/google-drone-deliveries-coming-next-year/
http://fortune.com/2016/01/11/google-drone-deliveries-coming-next-year/#respondTue, 12 Jan 2016 01:30:24 +0000http://fortune.com/?p=1510828]]>Drones will deliver toothbrushes, business supplies, and coffee beans within the next one to three years if the private sector and government work hand in hand.

At least, that’s according to Dave Vos, head of Google X’s Project Wing experimental drone delivery program. He said on Monday during an aviation industry event in Washington that drones will be safer than general aviation and that they will operate quietly enough so as not to disturb anyone, according to a CNN report.

“Moving people and stuff around the planet in an efficient way is where I want to get,” said Vos.

Google has been exploring the use of drones for deliveries over the past three years. The search giant and other mega retailers like Amazon AMZN and Wal-Mart WMT have all reportedly been developing their own fleet of drones to ship orders.

However, a number of regulatory issues must be ironed out first. Currently, businesses interested in flying drones for commercial purposes need to seek FAA approval on a case-by-case basis.

Additionally, under current drone rules, companies can't fly drones at night and drone operators are not allowed to fly more than one drone at a time. Amazon and drone industry groups have argued that these types of limitations are hurting the burgeoning U.S. drone industry.

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Last week, Federal Aviation Administration Administrator Michael Huerta said that the government plans to finalize its drone rules for commercial operations by late spring.

The FAA in October enlisted a handful of drone makers, industry advocates, and retailers like Google GOOG to help create the registration system and rules. The registration system came online in late December, and since then has logged over 181,000 drones in its database as of early January.

Vos said the recently created national drone registry system is an example of how government and the private sector can work together to advance drone technology, according to a Bloomberg News report.

WATCH: For more on drones see our Fortune video:

He’s so confident in drones that he put out an idea that goes beyond drones merely delivering routine household items. The technology is progressing to the point that giant drones could soon shuttle people like airborne taxis.

]]>http://fortune.com/2016/01/11/google-drone-deliveries-coming-next-year/feed/0493606849 dronejonathanvanian2015This Big Retailer Could Kill Your Subscription Startuphttp://fortune.com/2015/12/14/walmart-birchbox-startup/
http://fortune.com/2015/12/14/walmart-birchbox-startup/#respondMon, 14 Dec 2015 20:02:52 +0000http://fortune.com/?p=1480590]]>Some of you might be old enough to remember the milkman - the person who delivered dairy products to your home every few days. Or you might recall the Columbia Record Club, which regularly brought music to mailboxes. And then there's the venerable and still-going Book of the Month Club, which keeps subscribers abreast of trends in literature.

Let's keep that history in mind as we consider the soaring popularity of subscription services in which boxes of products or food or goodies appear regularly at your door. Companies like Birchbox,Blue Apron, Club W, OwlCrate, BarkBox, and Bespoke Post are among those leading the way in services that let consumers sample beauty products or exotic food or young adult books or other specialty items without leaving the house. "Best of" suggestions for subscription boxes are also popping up this season as hot items on numerous holiday gift guides - which would certainly lighten Santa's sleigh.

Yet the basic concept is as old as the cheerful man in white who left bottles of milk in the box on your front step. What's new about subscription boxes is their use of Internet technology, in which consumers can order subscriptions online, customize the items they want in some cases, and record and upload their reactions to social media. And then there's the emotional effect that the milkman didn't spark - the experience of opening the box, that anticipation of the surprises inside and the sense of gift giving ... to yourself. It's like Christmas every month without the standard rejoinder of: "Oh, you shouldn't have."

It's a powerful draw but before entrepreneurs rush into the subscription box space, they should take heed of a number of factors, including an overloaded market and the entry of big players. And there's always the issue of retention - will subscribers become loyal fans or does the box require a stream of new customers eager to try a new thing?

There's no question that subscription boxes are seeing explosive growth. Liz Cadman of My Subscription Addiction says her site lists 1,500 subscription boxes as of November 2015. This includes all types of categories and price ranges: pure subscriptions, limited editions and hybrid models, which have both subscriptions and a physical retail space.

Boxes span the spectrum from "mass customization" such as with snack service Graze to "same box" for all its subscribers. Bespoke sends the same box to all customers each month but allows customers to skip boxes they are not interested in. Stitchfix offers fashion and Quarterly access to boxes curated by celebrities. Some boxes cost as little as $10 to $20 a month; the Opulent Box costs $25,000 per quarter for those who want to open a box of luxury jewelry by name brands.

Boxes may allow consumers to sample products before they buy and thus could be a great vehicle for manufactures who wish to encourage consumers to try a product before they buy a full-size product. Some box services, however, mostly those focusing on food, are not particularly economical. Consumers would likely pay less if they were to buy the individual items in a grocery store. But consumers are often looking for convenience and are overwhelmed by too much variety; with a subscription box, someone is managing that for you. So box subscribers are motivated by a combination of rational choices and affective emotional responses.

Most importantly, a company must develop deep relationships and customer loyalty. Over the long term, it is not customer acquisition but rather customer retention that will separate the box subscriptions that thrive from those that flounder.

Which is why big players, such as Walmart wmt and Amazon amzn - which have started tip-toeing into this space - could be formidable competitors. They already know how to do this - they have the data, the logistics and the infrastructure. Amazon's Prime Music service with its personalized recommendations and playlists triggers anticipation and is stimulating. Walmart is trying to do the same with its beauty box and baby box. The subscription box business is complex, requiring smart, nimble and holistic cross-functional integration and execution to thrive and excel over the long haul. Nevertheless, one cannot minimize the importance of emotionally engaging one's customers; herein lies the advantage of entrepreneurs, specializing and dedicating themselves to subscription boxes rooted in passion and creativity.

Venture capitalists are taking note and investing in this space: Birchbox has received $70 million and Blue Apron has received $135 million - giving it a $2 billion valuation. But the fallout may have begun: Several of the 1,940 subscription boxes listed on the directory Hello Subscription were already noted as closed! So it is important to assess what it takes to run such a business.

Sure, you can get started quickly but it's a very challenging business model for the long haul. Running a subscription box service requires that you create the ultimate integrated company with excellent strategy to differentiate its value proposition in this crowded space. You'll need superb marketing capabilities to identify heterogeneous customer tastes and preferences and buying behavior through data collection and analysis.

You must have phenomenal logistics and supply-chain management and you must operate in a highly effective and efficient manner, given the low margins. You must manage lots of moving parts, from sourcing uniquely appealing products to packaging them together and shipping on time for a growing customer base with diverse tastes and preferences. Don't be overly swayed by the buzz around box subscriptions as holiday gifts.

Still, subscription boxes are likely here to stay, even if the industry consolidates. The milkman may have vanished along with rotary phones, but you can check out the dairy-free subscription box NoMoo. Those who can emulate NoMoo's unique value proposition and run the ultimate integrated company will be the winners in this innovative, crowded and fast-moving marketplace.

Sharmila C. Chatterjee is senior lecturer in marketing and the academic head for the Enterprise Management Track at the MIT Sloan School of Management.

Despite major retailers like Walmart WMT, Target TGT, and Best Buy BBY starting to offer many Cyber Monday deals on Sunday this year, the biggest online selling day of the year is already shaping up to be a blockbuster, generating record revenue.

Adobe, which tracks 80% of all online transactions at the 100 largest U.S. retailers, said on Monday that online sales had already hit $490 million in the morning, on their way to $3 billion for the day.

IBM, which also monitors e-commerce, is forecasting that online sales on Cyber Monday will rise 18% compared to last year, fueled by a boom in shopping on mobile devices. E-commerce rose 25.5% over the four-day Thanksgiving weekend, according to IBM.

If the prediction comes true, it would continue what has turned out to be a historic weekend in retail: as Fortune reported on Sunday, a National Retail Federation survey found more Americans shopped online this weekend (103 million) than in stores (102 million for the the first time, a major turning point in shopper habits.)

A number of brick-and-mortar retailers like Target, J.C. Penney JCP, and Kohl’s KSS all reported big jumps in online sales this weekend.

Of course, the online bonanza is fueled by deep discounts aimed at fending off Amazon.com AMZN, something that could ding profit margins.

“While the topline is a definite plus--consumers are also out in full-force looking for great offers. That makes Cyber Monday a meek day for margins--and that is a challenge for retailers,” said Forrester Research analyst Sucharita Mulpuru.

]]>http://fortune.com/2015/11/30/record-breaking-cyber-monday-sales/feed/0Operations Inside An Amazon.com Inc. Fulfillment Center Ahead Of Cyber MondaypwahbaWalmart Workers Plan Black Friday Protests for the Fourth Year in a Rowhttp://fortune.com/2015/11/25/walmart-black-friday-protest/
http://fortune.com/2015/11/25/walmart-black-friday-protest/#respondWed, 25 Nov 2015 15:26:16 +0000http://fortune.com/?p=1444713]]>It just wouldn’t be Black Friday without a worker protest at Walmart.

A group that calls itself Our Walmart and advocates for workers at the retail giant is planning demonstrations at a dozen locations nationwide as it continues to push for a $15 per hour minimum wage and full-time status for workers.

Protests at the nation’s largest retailer have become a kind of Black Friday tradition ever since they began in 2012, when employees clamored for Walmart to end what they characterized as retaliation for speaking out for higher pay, fair schedules, and health care they could afford.

This year is somewhat different. Around nine months ago, Walmart announced that it would raise its wages. In April, it implemented a starting rate of $9 per hour that will increase to $10 per hour in February 2016. The Our Walmart group touts the wage increase as a victory, but it remains steadfast in its demand for $15 per hour.

The $15 per hour rate has become a near universal demand of wage advocates in the United States. In February, Walmart spokesman Kory Lundberg told Fortune that the retail chain listens to its “critics,” and that the store’s new $9 starting wage “made sense for our associates.” Increasing the wage even more, he said, would have set "the first rung of the economic ladder too high," making the jobs "unattainable" for workers seeking entry level experience. Following its wage hike, Walmart reportedly cut workers’ hours at some stores in an effort to reduce labor costs, though Lundberg told Bloomberg that those reductions only happened at locations where managers had over-scheduled workers.

The protests scheduled for Friday also come in the wake of an upheaval in the ranks of Our Walmart itself. There are now two separate groups that--confusingly enough--claim the Our Walmart name, which stands for Organization United for Respect at Walmart.

The original group was an independent, non-union organization under the umbrella of the United Food and Commercial Workers union. In September--after the UFCW fired two senior organizers who ran its Our Walmart arm--some members split from the UFCW-backed group, launching a separate organization under the Our Walmart moniker but with the support of several other activist groups, including the National People's Action, Demos, and the National Domestic Workers Alliance. The latter group will be staging protests on Black Friday.

The UFCW, meanwhile, says it still owns the Our Walmart name, the group’s logo, and its Facebook page. On Tuesday, the union announced its own plans for targeting Walmart during the holiday shopping season. Instead of organizing demonstrations at Walmart stores this year, it’s launching 1,000 food drives in cities with Walmart stores to bring attention to how little Walmart workers are paid.

In response to Our Walmart’s planned demonstrations on Black Friday, Walmart spokesman Brian Nick said in a statement that Walmart’s average full-time hourly employee earns more than $13 an hour and has the chance for quarterly cash bonuses, a matching 401k. and health care benefits. “We know it takes quality [employees] to give our customers a great shopping experience,” he said, “and we're proud of the wages and benefits package we offer.”

]]>http://fortune.com/2015/11/25/walmart-black-friday-protest/feed/0Walmart black friday protesters 2013clairezillmanFortune 500 brands: Killer apps are more important than advertisinghttp://fortune.com/2015/10/12/walgreens-walmart-citi-711-mobile-apps/
http://fortune.com/2015/10/12/walgreens-walmart-citi-711-mobile-apps/#respondMon, 12 Oct 2015 14:00:38 +0000http://fortune.com/?p=1360806]]>As mobile ad blockers surge in popularity, the advertising industry has been forced to concede that a lot of people really don't like their product.

The evidence is too clear to ignore: The minute Apple started allowing ad-blocking apps into its App Store, millions of people who hate ads enough to download a special app that blocks them did exactly that. This is remarkable when you consider how hard it is to get people to download new apps at all. (The average number of new apps Americans downloads each month is zero.)

During its Advertising Week event this month, the ad industry spent many a panel, presentation and party wringing its hangs over this troubling new existential crisis. How will advertisers reach their customers on mobile if their customers are blocking them?

But this was the wrong question to ask. Agencies, publishers and ad-tech execs should have focused on a different troubling reality: Brands don't really want to buy their lousy mobile ads to begin with.

I witnessed this firsthand at a panel of Fortune 500 executives I moderated at the Tap Conference during Advertising Week. When I asked panelists fromWalgreens, Citi, 7-11, and Wal-Mart about their top mobile priorities, they said user experience trumps mobile advertising any day. Agencies and ad platforms might want to take note. They won't have to worry about their mobile ads being blocked if they can't sell any to begin with.

Here are their answers (slightly condensed). The full video is below.

Adam Kmiec, Sr. Director, Mobile, Social And Content Marketing, Walgreens: There is no greater in marketing in mobile than the actual product itself. And there's nothing worse in marketing than the product itself. A horrible app experience, a horrible mobile web experience … is something that frustrates you, you uninstall the app, you won't trust it again when there's another release that addresses all the changes or fixes in there.

But a really, purely enjoyable experience — one that actually works the way it's supposed to work — is, in and of itself, some of best marketing that is there.

Given a choice about where I'd put my next dollar, I'd put my next dollar into enhancing the actual mobile experience itself before I'd put it into another ad that's going to tell someone about how great it is.

Maja Lapcevic, SVP at Citi Ventures: Our whole company was restructured under an amazing woman named Heather Cox, and it's all about customer experience and the products that are driving it. As we said earlier, who goes to a bank anymore? You really need to be able to deliver on the experience. [We were among the] first apps that launched on the Apple Watch. That got us probably more attention than the billion or more [dollars] that we spend on marketing.

Raja Doddala, Vice President, Omnichannel & Ventures at 7-11: Product and experience is marketing. Using technology to make our experience more convenient is where we should spend our efforts.

Ojonimi Bako, Director CTO, Strategy and Operations, WalmartLabs: One of the luxuries you have in terms of being at a large company [is] there's traction. So how do you direct and capture that traction and leverage it to provide a really good experience with the customer? That's something we continue to work on, especially on mobile, to figure out how do we want to use ads in a way that is not intrusive but can also enhance the experience with the customer.

You can follow Erin Griffith on Twitter at @eringriffith, and read all of her articles here.

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]]>http://fortune.com/2015/10/12/walgreens-walmart-citi-711-mobile-apps/feed/0Screen Shot 2015-10-11 at 3.31.58 AMgriffitherinHere’s how many workers Walmart is hiring this holidayhttp://fortune.com/2015/09/17/walmart-holiday-workers/
http://fortune.com/2015/09/17/walmart-holiday-workers/#respondThu, 17 Sep 2015 15:10:26 +0000http://fortune.com/?p=1313443]]>It’s still technically summer, but retailers are already laying the groundwork for the all-important holiday season.

Walmart on Thursday released its plans for hiring seasonal workers, saying it expects to hire 60,000 temporary employees for the holidays this year. Walmart said in a press release that it will have more associates in its stores working more hours this season, and they will “focus on providing service and convenience to our customers.”

The upcoming holiday season will be the first since Walmart introduced a higher starting wage for its workers. In February, the retail giant announced that it would pay its associates a minimum of $9 per hour starting in April. The decision came after years of protests by Walmart workers who complained of poor pay and often organized protests during the company’s busy holiday season. The wage increase was considered a win for workers, but since it took effect, there have been reports of store managers reducing some workers’ hours as a way to reudce costs.

"Hurricane Katrina touched our customers, communities we serve, and our associates in a profound way," McMillon said in the video posted on the photo-sharing network, which received 132 "likes" in its first five hours.

The catastrophic storm made landfall on Aug. 29, 2005, ravaging New Orleans in what U.S. officials have called the most devastating natural disaster in the nation's history.

"We haven't forgotten," McMillon said in a separate statement released by Walmart. The retail giant, together with its charitable arm Walmart Foundation, will dole out the $25 million gift over five years to organizations specializing in disaster recovery and relief. "We will continue to help communities prepare for--and recover from--the unexpected," McMillon continued.

See McMillon’s Instagram post announcing the gift here:

New Orleans mayor Mitch Landrieu also recognized Walmart's own work to help the city recover from the storm, saying it "opened make-shift stores," sent "truckloads of supplies," and "activated associates on the ground to help," according to the company's official announcement. "When Hurricane Katrina struck the Gulf Coast, Walmart was on the front lines of the response," Landrieu said. "In turn, they started to change the role of the private sector in disaster response."

McMillon's decision to use Instagram to announce the philanthropic gift reflects his growing closeness to the social media company, which is owned by Facebook FB. Last September, Instagram co-founder Kevin Systrom joined Walmart’s board, and McMillon began posting photos to his personal Instagram account in June.

]]>http://fortune.com/2015/08/21/walmart-ceo-mcmillon-katrina-gift/feed/0doug_mcmillonjwiecznerApple Pay rival to hit stores this Augusthttp://fortune.com/2015/07/24/apple-pay-rival-currentc/
http://fortune.com/2015/07/24/apple-pay-rival-currentc/#respondFri, 24 Jul 2015 14:57:52 +0000http://fortune.com/?p=1219654]]>Apple Pay rival CurrentC is gearing up for use in stores by consumers.

The app -- which was created by Merchant Customer Exchange and has funding from Wal-Mart WMT, Target TGT, and Best Buy BBY -- is getting a limited trial run in stores next month, according to Bloomberg. It’s expected to be used in larger public tests later this year, the report said.

Merchant Customer Exchange is expected to introduce the app during the third quarter, Bloomberg said.

The app has fierce competition, though, with electronic payment systems from Apple AAPL and Google GOOG already available to shoppers.

As the report notes, there are security and other issues involved as CurrentC goes public. For instance, the app was hacked last year during testing, which might make potential users wary of its safety. And Bloomberg notes that CurrentC has not signed deals with credit-card companies.

"We expect there to be more than one successful player in mobile payments, and we expect to be one of them," Scott Rankin, Merchant Customer Exchange’s COO, told Bloomberg.

]]>http://fortune.com/2015/07/24/apple-pay-rival-currentc/feed/0Apple Pay Tim Cook 2014snyderfortuneIt took Wal-Mart four years to buy this companyhttp://fortune.com/2015/07/23/walmart-chinese-company-yihaodian/
http://fortune.com/2015/07/23/walmart-chinese-company-yihaodian/#respondThu, 23 Jul 2015 13:23:04 +0000http://fortune.com/?p=1218500]]>It took four years, but Wal-Mart has finally fully gobbled up Chinese e-commerce company Yihaodian.

The world’s largest retailer on Thursday said it acquired the final outstanding shares of Yihaodian, taking full ownership of the company after an initial investment began back in 2011. Wal-Mart WMT had previously boosted its stake in the company in 2012, when it took a 51% majority control position. Terms of the latest acquisition weren’t disclosed.

“Yihaodian has excelled as one of China’s top e-commerce businesses,” said Neil Ashe, president and CEO of Wal-Mart Global eCommerce. He said the investment is part of Wal-Mart’s “long-term commitment to grow in China.”

With full ownership of Yihaodian, Wal-Mart plans to invest in both accelerating e-commerce and also an easier experience for customers to shop online, via mobile and in brick and mortar stores. Yihaodian, which was founded in 2008, will continue to operate under its existing name.

Wal-Mart touted the Chinese company’s swelling business: it now stocks 8 million product items and serves 100 million registered customers. Those figures are up from 50,000 and 4 million, respectively, back in 2010.

The Chinese e-commerce market has huge potential for global retailers such as Wal-Mart, as well as home-grown competitors. Total online retail spending in China was projected at $307 billion in 2013, and Forrester Research has estimated it should exceed $1 trillion by 2019.

]]>http://fortune.com/2015/07/23/walmart-chinese-company-yihaodian/feed/0Images of Walmart Stores in BeijingjohnnerkellWalmart’s Confederate flag stand signals new corporate activismhttp://fortune.com/2015/06/23/walmarts-stand-signals-new-corporate-activism/
http://fortune.com/2015/06/23/walmarts-stand-signals-new-corporate-activism/#respondTue, 23 Jun 2015 11:52:43 +0000http://fortune.com/?p=1189554]]>Walmart's WMTquick decision to remove confederate flag themed products from its stores following the killings in South Carolina reflects a sea change in attitudes about business leadership.

Not long ago, the standard big company response to controversial social and political issues was to lay low and stay out of the line of fire. But the quick corporate backlash to the Indiana religious liberties law earlier this year marked a turning point. Increasingly, corporate leaders believe taking a stance on such issues is an important signal to both customers and employees, who want to do business with, or work for, a company that they believe is doing good in the world.

In our recent survey, we asked Fortune 500 CEOs which of the following statements best reflected their own philosophy:

As a CEO, it's best to focus on issues that directly affect the bottom line, and avoid controversial public issues.

Or

As a CEO, it's important to take a stand on some public issues.

Just over half of the CEOs who responded - 52% – chose the second response, while 48% choose the first. This is the first year we've done the survey, so we can't say how that's changed over time. But my conversations with dozens of CEOs lead me to believe the response is significantly higher than we would have gotten as recently as a decade ago.

Some CEOs also say they also feel compelled to speak out on public issues because of the general failure of political leadership, as typified by the waffling among GOP candidates on the flag issue.

]]>http://fortune.com/2015/06/23/walmarts-stand-signals-new-corporate-activism/feed/0amurrayfortuneOnes to watch: Predicting the Fortune 500 of 2025http://fortune.com/2015/06/08/fortune-500-2025-prediction/
http://fortune.com/2015/06/08/fortune-500-2025-prediction/#respondMon, 08 Jun 2015 22:26:50 +0000http://fortune.com/?p=1147633]]>The Fortune 500, our annual ranking of the largest U.S. companies, has been in a constant state of flux since the first one was published in 1955. This year is no different, and surely by 2025, plenty of companies we've barely heard of will knock stalwarts and industry incumbents from the list.

We could easily speculate as to which hot startups and fast-growing businesses are destined to join the Fortune 500 in the next decade. We could even pull directly from our annual fastest-growing public companies list, which last year was dominated by the shale, financial services and housing/real estate sectors.

But our speculation would be just that. Rather than take wild guesses, we've turned to data. The following list takes the average compound annual growth rate, or CAGR, over the last five years for the Fortune 500 and uses that figure to extrapolate each company's growth for the next 10 years. Assuming that past growth equals future growth is not a perfect methodology. (For example, our top pick, Energy Transfer Equity, has grown thanks to an $18 billion acquisition that it will likely take years to absorb and not be repeated.) Beyond that, one has to assume there are limits to how much a company can grow. The first six companies on our "Fortune 500 of 2025" list have projected revenues of more than $1 trillion. That's more than double the 2014 revenue of Wal-Mart, the No. 1 Fortune 500 company on this year’s list, and feels like a bit of a stretch. Still, it's a fun thought exercise.

The list is notably dominated by what's thought of as the four horsemen of the tech industry: Apple, Facebook, Amazon, and Google. Even though they're all large, maturing businesses, they have continued to roll out new products, acquire exciting startups, and push into new lines of business at an aggressive pace. Their revenue growth reflects that.

And if you're reading this from the year 2025, feel free to let us know how wrong we were.

1. Energy Transfer Equity

Photograph courtesy of Energy Transfer Equity

The company, ranked No. 53 on the Fortune 500 list, grew revenue by 14% last year and tripled its annual profits, even amid a global drop in commodity prices. If the company [fortune-stock symbol="ETE"] continues to grow at the same pace it did for the last five years, by 2024--and therefore our 2025 Fortune 500 ranking--it would have $5.8 trillion in revenue. That's unlikely-most of the company's growth came from a big acquisition, and last year Energy Transfer Equity did just $56 billion in revenue.

2. Apple

Photograph by Stephen Lam -- Getty Images

If Apple [fortune-stock symbol="AAPL"] continues its recent revenue growth over the next 10 years, it will hit $4.5 trillion in sales in 2024, making it the country's second-largest corporation.

3. Facebook

Photograph by Nelson Almeida -- AFP/Getty Images

Ten-year-old Facebook [fortune-stock symbol="FB"] has only been a public company for three years, but its 58% revenue growth, driven by mobile advertising revenue, rivals that of a young startup.

5. Leucadia National

Courtesy of Leucadia National

The "baby Berkshire Hathaway" conglomerate owns businesses as diverse as banks, plastics companies, timber operations, energy companies, a ski resort, and a beef packing business. It has grown through acquisitions, most recently its 2012 merger with Jefferies Group, worth $3.8 billion. Despite its relatively small $12.4 billion in revenue in 2014, if Leucadia [fortune-stock symbol="LUK"] continues at the same growth rate for the next decade, it would manage $1 trillion in revenue in 2024.

6. Amazon

Photograph by Philippe Huguen -- AFP/Getty Images

Even with $88 billion in 2014 revenue, Amazon [fortune-stock symbol="AMZN"] remains a growth story. The company increased revenue by 19.5% over the prior year. (Profits, in typical Amazon fashion, were non-existent.) If Amazon continues that growth trajectory for a decade, it would have just over $1 trillion in profits in 2024.

7. Exxon Mobil

Photograph by Luke Sharrett -- Bloomberg via Getty Images

If the oil company, which holds the second-place spot on this year's Fortune 500, continues its current five-year growth rate, Exxon Mobil [fortune-stock symbol="XOM"] will bring in $691 billion in revenue in 2014.

8. Wal-Mart Stores

Photograph by Gunnar Rathbun -- Invision for Walmart

That's right--we're predicting that in 10 years, Amazon will be bigger than Wal-Mart, the country's largest corporation [fortune-stock symbol="WMT"] for three years in a row. (Amazon was No. 29 on the Fortune 500 this year.) Even with modest growth--Wal-Mart's revenue increased just 2% between 2013 and 2014--its size alone will keep it high on the Fortune 500 list of the future if it can continue defend its market position from online competition.

9. Google

Photograph by Robert Galbraith -- Reuters

By 2025, we'll know how many of Google's crazy moonshots have actually paid off and which ones look more like pipe dreams. We'll also know whether the company [fortune-stock symbol="GOOG"] successfully transitioned its money-printing search engine--which performs best on desktop browsers --onto mobile. If it does, expect Google to climb to the elite ranks of the Fortune 10 (it's No. 40 this year), with $653 billion in revenue.

10. World Fuel Services

Courtesy of World Fuel Services

The fuel services company [fortune-stock symbol="INT"], listed at No. 68 on this year's Fortune 500 list, could see revenue grow to $640 billion if it continues its current growth rate.

]]>http://fortune.com/2015/06/08/fortune-500-2025-prediction/feed/0131217200111-odd13-crystal-ball2griffitherinWalmart’s CEO calls on staff to be like Han Solo, other Star Wars rebelshttp://fortune.com/2015/06/05/walmart-star-wars/
http://fortune.com/2015/06/05/walmart-star-wars/#respondFri, 05 Jun 2015 18:11:15 +0000http://fortune.com/?p=1161846]]>Walmart’s WMT CEO Doug McMillon wants his 2.2 million employees to summon their inner Hans Solo, Chewbacca, and Princess Leia to fight the evil empire of stagnation and help the world’s largest retailer resume faster growth.

Speaking on Friday to 14,000 store workers and investors at Wal-Mart Stores’ annual shareholder meeting in Fayetteville, Ark., McMillon said the retailer’s No. 1 enemy, ahead of rivals, was its own bureaucracy, and he called on store workers to take more initiative on their own.

“The truth is the real villains are lurking within the company,” said McMillon. “Our real villains are things like bureaucracy, complacency, a lack of speed, or a lack of passion.”

Walmart’s operating income only rose 1% last year, while in the U.S., its biggest market by far, comparable sales are growing again, but only modestly. So in the last few months, Walmart has announced a series of steps ranging from raises to less Celine Dion on the PA system to new training as it looks to motivate workers, improve customer service and how stores look, and reduce worker turnover. (Walmart U.S. CEO Greg Foran told Wall Street analysts that turnover is already down, and job applications are up.)

“We can be like scrappy rebels in Star Wars, fighting an insurgency against the galactic empire,” he said, apparently unaware of the irony of the world’s largest company by far, with 2014 sales of $482 billion, one seen by many as the empire that needs to be fought against, is trying to position itself as the underdog.

Proposals by dissident shareholders, including one in favor of an independent chairman, were defeated, no surprise considering the Walton family, whose late patriarch Sam founded the company in 1962, owns 51% of shares.

McMillon’s plea for staff “to overcome bureaucracy and mediocrity” echoes efforts at arch-rival Target TGT to tame its own bureaucracy, which it did earlier this in part by cutting thousands of jobs at its headquarters, and re-motivate staff.

He recently removed one layer of store management and gave U.S. store workers more say in how their store operates and what it stocks.